Childcare plans fair and workable

Taxpayer-subsidised childcare will be cheaper, easier to find and more flexible for those who need it most if proposals from the Productivity Commission are implemented.

The 40-odd recommendations in the commission's draft report should encourage more women into the workforce. Most are fair and based on ability to pay. Some even include Gonski-style extra support for children with special needs.

Quality early education and caring are crucial for childhood development.
Photo: Peter Braig

The big question mark is whether politicians have the will to deliver the changes.

The commission predicts its preferred scheme will reduce the average share of childcare costs paid by parents from 38 per cent to 30 per cent. It wants quality safeguards to allow providers to offer "a range of care-only and care-education combinations that meet the needs and [lower] budgets of families". It also proposes longer hours and more places at occasional-care providers.

But criticism will come from some educators and unions. They will question the plans to extend childcare subsidies to nannies and lower the qualifications required for carers of toddlers as well as children in outside-of-school-hours care. There are likely to be relatively fewer jobs for highly qualified teachers and carers as a result.

Granted, parents of babies in care are likely to face higher fees and high-income earners will be out of pocket thanks to a means-tested single payment called the Early Care and Learning Subsidy. Some may even lose their fringe benefits tax breaks for childcare.

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Then there's an activity test that stops payments to most stay-at-home parents. That will slug certain religious groups and people without stable employment or access to skills programs. In addition, a tough-love requirement will link family benefit part A to preschool attendance.

For those who pass the tougher tests, though, the subsidy will be available for up to 100 hours' care per fortnight. It will be paid as a proportion of yet-to-be-finalised amounts that are deemed to reflect the cost of care rather than what providers charge. This will improve transparency and value for money.

Crucially, the subsidy will depend on a child's age (the base rate will be lower for three- and four-year-olds whose care costs less); and the type of care (presumably less subsidy for at-home nannies).

The cost to government is estimated at $8 billion per year – not much more than already budgeted over the next four years.

Prime Minister Tony Abbott may of course wish to do nothing. That would also help him avoid responding to the embarrassing claim by the commission that it is "unclear" his proposed paid parental leave scheme is any better than the current one. Like the Herald, the commission argues money should be diverted from the PPL into childcare.

At the core of the commission's proposals is acceptance that good childcare has economic benefits and that quality early education and caring are crucial for childhood development.

But while the commission demands a year of preschool for all children, and supports more formal learning for all disadvantaged children no matter what age, it also draws a clear line.

The commission concludes that the evidence of developmental benefits of universal quality education for children aged one to three "is less compelling".

That distinction drives the report's proposals to refine quality, qualification and accreditation rules in the sector.

The commission proposes employment of an early-childhood teacher at a centre be based on the number of children over three years of age (rather than on the total number of children). All early-childhood staff caring for children younger than this would need only "an appropriate lower level of qualification (such as a certificate III)".

Parents who employ nannies with those qualifications will for the first time be eligible for a subsidy. They can work in private homes caring for the children of one or more families.

In addition, staff ratios and qualifications for educators at out-of-school-hours care providers should reflect, as the Herald has argued, "the valuable contribution that can be made to OSHC services by less qualified older workers and university/TAFE students".

The commission's means test limits appear sensible with one caveat. Those on less than $60,000 a year will get a subsidy of 90 per cent of the deemed cost of childcare. The return will gradually shrink as income rises until those on $300,000 receive 30 per cent. That may be too generous, given the commission admits such payments "may not change the workforce participation or (childcare) decisions of many of these families".

The Abbott government will find it difficult to sell some of the measures to Coalition supporters. Labor will struggle to convince unions. But all parties should recognise the commission has delivered a framework for better childcare that can work with minimal fine-tuning.